Inexcusable delay

The delay in making laws, and then in implementing them, has often been a characteristic feature of Nepal’s governance. Some of the laws, and even certain constitutional provisions, have long been in limbo for lack of the regulations or the laws to make them operative. The Working Journalists Act is a case in point, as it remained unimplemented for about a decade, then was recently amended. The excuse was the lack of necessary regulations. That means successive governments have simply ignored it. The same applies to the competition law passed eight months ago to promote fair business practices. Judging by its importance, the law should have been introduced decades ago. Strangely enough, successive governments did not feel the need for it even when the country opted for economic liberalisation after the 1990 people’s movement. Even the present introduction of the law is aimed at meeting one of Nepal’s WTO obligations.

There has been a prolonged failure to put in place sufficient safeguards to ensure that businessmen play by the rules, that they do not take undue advantage of the consumers and their competitors, and that they cannot go scot-free if they do. While the implementation of the existing business laws is far from satisfactory (for example, the consumers protection law), the state of affairs in areas where virtually no law exists is anybody’s guess. The Stock Exchange expanded over the years, but a law was not brought to punish the brokers and businessmen who tend to create an artificial rise or fall of share prices for personal benefit. Most of the business laws have been considered inadequate, with loopholes for the culprits to escape. This impunity has only added distortions to trade practices in Nepal. The Competition Promotion and Market Protection Act, 2063, though rather a belated act, is none the less a small step in the right direction. Ultimately, proper implementation of this law would help make firms more competitive and their practices more straightforward. As a result, the business sector, consumers and the economy stand to benefit in various ways.

This law makes illegal various practices such as cartel forming, collective price fixing, tied selling, bid rigging, market restrictions, market segregation, syndicate operation, undue business influence and exclusive dealing. It provides for compensation for the loss or damage caused through unfair trade practices. It also provides for up to half a million rupees in fine for any violation of the ceiling of 50 per cent share on ownership of another company in the same line of business. However, scepticism has also been expressed over certain provisions, particularly those relating to implementation of the law, the structure and composition of the board to be formed to enforce the law, delegation of ‘excessive’ special authority to competition inspectors, lighter penalties for offences, vague terms and conditions and the lack of tough and clear punishment for offending law-enforcement officials.

The delay in introducing the regulations reflects poorly on the government.